The recently passed California budget assumed $4 billion in increased revenues. Without that additional income, the budget will not be balanced. Draconian cuts will then ensue, and will hit education hard.
The estimates in revenue increases were apparently due to the expectation that high income individuals, especially in tech, will be making substantially more, and thus paying more in taxes. While there has been a burst of IPOs in Silicon Valley recently, which has created instant mega-millionaires, it’s difficult to see how this could lead to sustained and reliable income for the state.
Early last Friday morning, financial sites and blogs were buzzing about how the jobs report was surely going to exceed expectations, and that this would be proof that recovery was at hand. But instead, the jobs report was beyond dismal. Only 18,000 net jobs were created in June, far less than the 150,000 that analysts were expecting. Spring was expected to be just a temporary slump, with numbers rebounding in the summer. Instead, the opposite happened. The numbers got worse.
This from the edd.ca.gov (7/12/11 9:00 am): “Updated: Number of individuals who have run out of benefits is now over 469,000.” These are folks in California who have used up the maximum 99 weeks of benefits without finding work. (This Sunday, I will join that group.) Many of these people have no other source of income and are in a desperate financial state. The same site offers them this advice: “Unemployed individuals may be eligible for assistance to meet basic needs as well as other services such as health care, counseling, employment and training assistance.” This has got to be a tremendous drag on the state’s economy.
Yikes. This is happening nationwide too…